There are over 4 million Indians in the United States and this includes those who are on business, work and other visas, besides American citizens of Indian origin.

Over 50% of Indians in the US are in the top 5 states: California, New York, Texas, New Jersey, and Washington.

There are over 750 Indian grocery stores in the US as well.

The typical Indian grocery store is about 700 Sq. Ft, located in the suburb (not the major cities) and tends to operate on 21% net margins, with some items (biscuits, Indian vegetables) topping over 50%.

It is not unusual to see 100% markup on items such as masalas, basmati rice etc.

The stores are small, cramped, usually not in the best shape, in highly trafficked neighborhoods, and offer pretty poor customer services.

They all thrive though. The average ethnic grocer will experience a 29% closing ratio in the first 18 months, whereas Indian grocers experience < 10%.

The average Indian grocery store also makes about $350K to $1 Million (Sunnyvale, Santa Clara) in profits.

Most of the produce and the packaged food is rather old, some way past their sell by date and many products are rarely replenished quickly enough to categorize them “fresh”.

They all make money though, and are pretty profitable.

So why have they not been disrupted?

There are some attempts: Increasingly Wal Mart and Costco are offering Rice, some Dal and some packaged foods such as Ready to eat meals (MTR, Gits). The “Asian Foods” aisle at your local Safeway and QFC is also a good source of some spices and masalas.

There has been no large scale attempt to cut out the expensive Indian Grocery store. I can easily imagine the 100% monthly subscription model online store doing well, but of course, I am neither a supply chain expert, nor an expert in Groceries.

I am curious though, to learn why none of the ethnic stores have been replaced or are being threatened by Internet distribution and discovery.

3 years ago to the month, I was at the crossroads. Having moved back to India and grown, then sold BuzzGain, I had founded my next startup and found a way to grow a new business.

I was spending more time helping entrepreneurs and was interested in starting a new company, but I realized that having a bigger impact is what I was seeking.

I met with Amaresh, at an event called Think Next in May and he was a very nice, humble and wicked smart guy was my impression. When he started talking to me about the Microsoft Accelerator program, I was keen to help. He then offered to get me on board full time and I was (as was everyone else) very surprised. I agreed because I thought the money and resources that Microsoft had, directed at the right places to help the startup ecosystem would go a long way to help India.

At about the same time, Rahul, Neda and David started the Bing Fund, with similar interests – to help entrepreneurs by investing in startups. Similar initiatives were started by others in other locations. A small, but passionate crew at Microsoft were keen to engage the startup community and help entrepreneurs.

Microsoft Ventures was formed in March 2015, when we brought all the startup resources into one single organization. We announced it in June 2013. It was going to comprise of an ecosystem program – BizSpark, accelerators to help startups grow and a fund to help startups scale.

From 2012 to 2014, I was in India, and built some great relationships there with investors and entrepreneurs. Microsoft Ventures was name the #1 accelerator in India by Economic times.

Late last year, I decided to move to Seattle to take on a bigger responsibility, but also to bring the startup culture to the large corporate Microsoft entity. After Satya became the CEO, it was more acceptable than before to be entrepreneurial at Microsoft.

Microsoft is big, large and great at many things, and is learning to be nimble and move quick, is my sense, after being here for a year in Seattle.There are many folks who have been here for over 15-20 years who are resistant to change and many folks who are very open to change as well.

Nonetheless, I had a lot fun, I think we had some impact and we certainly made a lot of friends. We helped many entrepreneurs and not a day goes by when I dont get an email from someone who wants to work for Ventures or be funded by the organization.

I think I will miss the entrepreneurs I interact with daily, the most, as part of Ventures, but I suspect I will continue to work with startups. Mostly I will miss working with an entrepreneurial team of folks who care deeply about startups.

Compared to 2008, the average startup is going through 3-4 rounds of funding before the Venture round series A. In fact, the most important skill startup entrepreneurs need to master right now is navigating the funding landscape.

It is not unusual to see startups bootstrap for 6-9 months, then get into an accelerator, and go through another accelerator (elapsed time after 2nd accelerator from start is usually 12-18 months and then go through an angel round of $250-500K and a seed round of $500K to $2 Million.

So, instead of having lemonade at the end the founders have water with a lemon.

In some cases I have seen startups go through a post-seed round after the seed round. Don’t call it a bridge round, it is apparently bad luck :).

The biggest challenge with all these rounds before the series A is dilution.

If I assume you and a co founder started a company, then you each own 100% of the company during bootstrapping. I am going to simplify and make it 50% each.

The average accelerator takes 6-10% in return for $50-$100K. I am going to assume 10% for $100K.

So, now after two accelerator rounds (very typical), you and your co founder own 40% each of the company (minus 10% for each accelerator, or 20% in total).

The average angel investor round, is now convertible in the Silicon Valley, but priced everywhere else. Typical dilutions are 10-25%. I am going to assume you get 10% dilution for $500K.

After the first angel round, you and your co founder each own 35% of the company.

Seed round valuations are rising, but so are dilution percentages. You will likely go through a seed round of $1 Million, diluting another 10%, which values your company at $10 Million post.

You and your co founder now own 30% of the company.

The next round will be the post seed round or the Venture round (Series A).

Both these investors will expect you to set aside 10-15% of your company towards employees, for the stock option pool. For the sake of simplicity I am going to assume 10%, but it is usually 15%.

Even before your series A, you and your co founder now own 25% each of the company.

Most entrepreneurs also bring on advisors early on. It is not atypical to have 3 advisors for the company and hence, you might end up giving them 0.3 to 1% of the company each. I am going to assume 0.3% each, so you will dilute another 1%.

Assuming you get a series A, with typical Venture terms, you will raise a $10 Million round and give up 30% to 40% of your company. I am going to assume 30% for $10 Million.

After the series A, you and your co founder each own 10% of the company.

I made the math very simple and it is usually not this simple, but here is a table to show the progress.

This is an illustrative example alone, not accurate, but in the ball park.

On one hand you have both diluted a lot, but on the other hand you are both “worth” close to $6 Million on paper.